when works contractor receives part payment every month from highway authority(govt) before completion of work. but duration of completion of work is 3 years. the highway authority (govt) does not have GST registration number. But they deduct TDS deposits in gst. The deducted tds amount is credited in works contractor cash ledger. so how to raise invoice and where to show in GSTR1.
11 July 2024
In your scenario, as a works contractor receiving part payments from a highway authority (government) which does not have a GST registration number but deducts TDS under GST provisions, here’s how you should handle invoicing and reporting in GSTR-1:
### Invoicing Process
1. **Invoice Requirements**: - **Content**: Issue a tax invoice for each payment received from the highway authority, even though they do not have a GST registration. - **Details**: Include your own GSTIN, invoice number, invoice date, description of services (e.g., construction of highways), total value of supply, and applicable GST rate (if any). - **Mention TDS**: Clearly mention that TDS has been deducted by the highway authority under Section 51 of the CGST Act, 2017.
2. **Format**: - Use a format suitable for tax invoices under GST, even if the recipient (highway authority) does not have a GST registration number.
### Reporting in GSTR-1
1. **Table 4A**: - Report these supplies in Table 4A of GSTR-1 under "Taxable outward supplies to registered persons (including UIN-holders)". - Even though the highway authority is not registered under GST, you will treat them as a registered person for reporting purposes.
2. **Details to Include**: - Enter details of each invoice issued to the highway authority, including the invoice number, invoice date, taxable value, and applicable GST rate (if any). - Since TDS has been deducted by the highway authority, the taxable value to be reported in GSTR-1 should be the gross amount (before TDS deduction).
3. **TDS Credit**: - The TDS amount deducted by the highway authority will be credited to your electronic cash ledger on the GST portal. - You can utilize this TDS credit for making GST payments (GST liability) or for other purposes as permitted under GST rules.
### Compliance Points
- Ensure that your invoices clearly indicate the TDS deduction by mentioning it on the invoice itself. - Maintain proper records of all invoices issued, TDS deducted, and credits received in your cash ledger. - Reconcile TDS deducted by the highway authority with the entries in your Form GSTR-2A (auto-populated details of inward supplies).
### Conclusion
By issuing tax invoices and reporting these supplies in GSTR-1, you comply with GST regulations even though the highway authority does not have a GST registration number. The TDS deducted will be reflected in your GST ledger, which you can use effectively for your GST compliance and payments. This approach ensures that you correctly account for both the supplies made and the TDS deducted under the GST framework.
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